Atkore Inc. (the 'Company' or 'Atkore') (NYSE: ATKR) announced earnings for its fiscal 2023 full year and fourth quarter ended September 30, 2023 ('fourth quarter').
'Atkore achieved solid results for fiscal 2023, as we continued to successfully execute on our strategic initiatives and deliver differentiated value to our customers,' said Bill Waltz, Atkore President and Chief Executive Officer. 'As our performance and financial results continue to normalize after our significant levels of outperformance and record results in fiscal 2022, we are encouraged by the resilience of our business model, and the differentiated value that our product portfolio provides to our customers. We believe that we have transformed, diversified and elevated the profitability of this business since our initial public offering.'
Waltz continued, 'In addition, I am proud of our disciplined approach to capital allocation. We have made great progress investing in the future of our Company while continuing to return cash to shareholders by executing over $990 million in share repurchases since the program was authorized in November 2021. The Board's addition of a new quarterly dividend program is an exciting next step for Atkore and our shareholders.'
Net sales for the fourth quarter of 2023 decreased to $869.9 million, a decrease of 15.5% compared to $1,029.0 million for the prior-year period. The decrease was primarily due to lower average selling prices of $173.8 million as the result of expected pricing normalization and the economic value of solar tax credits to be transferred to certain customers of $14.5 million. These decreases were partially offset by higher sales volume of $19.2 million from entities acquired during fiscal 2022 and 2023 of $10.4 million.
Gross profit decreased by $113.0 million to $301.5 million for the fourth quarter of 2023, as compared to $414.5 million for the prior-year period. Gross margins decreased from 40.3% in the prior year period to 34.7%. Gross profit and gross profit margin decreased due to declines in average selling prices of $173.8 million, partially offset by slower declines in the costs of steel, copper and resin of $90.9 million.
Net income decreased $79.9 million to $140.9 million for the fourth quarter of 2023, as compared to $220.8 million for the prior-year period, due to lower operating income of $107.4 million, partially offset by decreased income taxes of $27.0 million. Adjusted net income decreased $70.5 million to $161.0 million compared to $231.6 million for the prior-year period.
Adjusted EBITDA decreased $93.1 million, or 28.6%, to $232.0 million for the fourth quarter of 2023, as compared to $325.1 million for the prior-year period. Net income margin decreased from 21.5% in the prior-year period to 16.2% and Adjusted EBITDA Margin decreased 490 basis points from 31.6% to 26.7%.
Net income per diluted share was $3.63 for the fourth quarter of 2023, a decrease of $1.55 from the prior-year period. Adjusted net income per diluted share was $4.21 per share for the fourth quarter of 2023 compared to $5.52 for the prior-year period.
Segment Results
Electrical
Electrical net sales decreased $145.4 million, or 18.3%, to $649.8 million for the fourth quarter of 2023, as compared to $795.2 million for the prior-year period. The decrease in net sales is primarily attributed to decreased average selling prices of $133.4 million as a result of expected pricing normalization and decreased volume of $23.1 million, partially offset by increased sales from companies acquired in fiscal 2022 and 2023 of $9.8 million.
Adjusted EBITDA decreased $71.2 million, or 23.1%, to $237.6 million for the fourth quarter of 2023, as compared to $308.8 million for the prior-year period, and Adjusted EBITDA Margin decreased from 38.8% to 36.6%. The decrease in Adjusted EBITDA was largely due to lower average selling prices over input costs.
Safety & Infrastructure
Safety & Infrastructure net sales decreased $13.6 million, or 5.8%, to $220.2 million for the fourth quarter of 2023, as compared to $233.9 million for the prior-year period. The decrease is attributed to lower average selling prices of $40.4 million and the economic value of solar tax credits to be transferred to certain customers of $14.5 million partially offset by higher volumes of $42.4 million.
Adjusted EBITDA decreased $21.2 million, or 58.4%, to $15.1 million for the fourth quarter of 2023, as compared to $36.4 million for the prior-year period. Adjusted EBITDA Margin decreased to 6.9% from 15.6%. The Adjusted EBITDA decrease was largely due to lower average selling prices over input costs and the impacts of solar tax credit accounting.
Fiscal 2023 Full-Year Results
Net sales for fiscal 2023 decreased $395.2 million to $3,518.8 million, a decrease of 10.1%, compared to $3,913.9 million for fiscal 2022. The decrease in net sales is primarily attributed to decreased average selling prices of $646.6 million, the economic value of solar tax credits to be transferred to certain customers of $30.4 million and the unfavorable impact of foreign exchange rates of $15.1 million. These decreases are partially offset by increased net sales of $168.9 million from companies acquired during fiscal 2022 and 2023 and increased sales volume of $125.1 million across varying product categories within both the Electrical and the Safety & Infrastructure segments.
Gross profit for fiscal 2023 decreased $300.5 million to $1,339.5 million, a decrease of 18.3%, compared to $1,640.0 million for fiscal 2022. Gross margin decreased to 38.1% in fiscal 2023 compared to 41.9% in fiscal 2022 due to declines in average selling prices of $646.6 million, partially offset by slower declines in the input costs of steel, copper and PVC resin of $337.8 million.
Net income decreased $223.5 million to $689.9 million for fiscal 2023, as compared to $913.4 million for fiscal 2022. Adjusted net income decreased $191.1 million to $763.0 million for fiscal 2023 compared to $954.1 million for fiscal 2022. The decrease in both net income and adjusted net income was primarily driven by lower operating income of $340.3 million.
Adjusted EBITDA decreased $299.7 million or 22.3%, to $1,042.1 million for fiscal 2023, as compared to $1,341.8 million for fiscal 2022. The decrease was primarily due to lower operating income.
Net income per diluted share on a GAAP basis was $17.27 for fiscal 2023, a decrease of $3.03 from fiscal 2022. Adjusted net income per diluted share was $19.40 for fiscal 2023 compared to $21.55 for fiscal 2022.
About Atkore Inc.
Atkore is a leading manufacturer of electrical products for commercial, industrial, data center, telecommunications, and solar applications. With 5,600 employees and $3.5B in sales in fiscal year 2023, we deliver sustainable solutions to meet the growing demands of electrification and digital transformation.
Forward-Looking Statements
This press release contains 'forward-looking statements' within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements relating to financial outlook. Some of the forward-looking statements can be identified by the use of forward-looking terms such as 'believes,' 'expects,' 'may,' 'will,' 'shall,' 'should,' 'would,' 'could,' 'seeks,' 'aims,' 'projects,' 'is optimistic,' 'intends,' 'plans,' 'estimates,' 'anticipates' or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.
A number of important factors, including, without limitation, the risks and uncertainties discussed or referenced under the caption 'Risk Factors' in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission ('SEC') on November 17, 2023 could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Additional factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation: declines in, and uncertainty regarding, the general business and economic conditions in the United States and international markets in which we operate; weakness or another downturn in the United States non-residential construction industry; widespread outbreak of diseases, such as the novel coronavirus (COVID-19) pandemic; changes in prices of raw materials; pricing pressure, reduced profitability, or loss of market share due to intense competition; availability and cost of third-party freight carriers and energy; high levels of imports of products similar to those manufactured by us; changes in federal, state, local and international governmental regulations and trade policies; adverse weather conditions; increased costs relating to future capital and operating expenditures to maintain compliance with environmental, health and safety laws; reduced spending by, deterioration in the financial condition of, or other adverse developments, including inability or unwillingness to pay our invoices on time, with respect to one or more of our top customers; increases in our working capital needs, which are substantial and fluctuate based on economic activity and the market prices for our main raw materials, including as a result of failure to collect, or delays in the collection of, cash from the sale of manufactured products; work stoppage or other interruptions of production at our facilities as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiations of new collective bargaining agreements, as a result of supplier financial distress, or for other reasons; changes in our financial obligations relating to pension plans that we maintain in the United States; reduced production or distribution capacity due to interruptions in the operations of our facilities or those of our key suppliers; loss of a substantial number of our third-party agents or distributors or a dramatic deviation from the amount of sales they generate; security threats, attacks, or other disruptions to our information systems, or failure to comply with complex network security, data privacy and other legal obligations or the failure to protect sensitive information; possible impairment of goodwill or other long-lived assets as a result of future triggering events, such as declines in our cash flow projections or customer demand and changes in our business and valuation assumptions; safety and labor risks associated with the manufacture and in the testing of our products; product liability, construction defect and warranty claims and litigation relating to our various products, as well as government inquiries and investigations, and consumer, employment, tort and other legal proceedings; our ability to protect our intellectual property and other material proprietary rights; risks inherent in doing business internationally; changes in foreign laws and legal systems, including as a result of Brexit; our inability to introduce new products effectively or implement our innovation strategies; our inability to continue importing raw materials, component parts and/or finished goods; the incurrence of liabilities and the issuance of additional debt or equity in connection with acquisitions, joint ventures or divestitures and the failure of indemnification provisions in our acquisition agreements to fully protect us from unexpected liabilities; failure to manage acquisitions successfully, including identifying, evaluating, and valuing acquisition targets and integrating acquired companies, businesses or assets; the incurrence of additional expenses, increase in complexity of our supply chain and potential damage to our reputation with customers resulting from regulations related to 'conflict minerals'; disruptions or impediments to the receipt of sufficient raw materials resulting from various anti-terrorism security measures; restrictions contained in our debt agreements; failure to generate cash sufficient to pay the principal of, interest on, or other amounts due on our debt; failure to generate the significant amount of cash needed to pay dividends; challenges attracting and retaining key personnel or high-quality employees; future changes to tax legislation; failure to generate sufficient cash flow from operations or to raise sufficient funds in the capital markets to satisfy existing obligations and support the development of our business and other factors described from time to time in documents that we file with the SEC. The Company assumes no obligation to update the information contained herein, which speaks only as of the date hereof.
Contact:
Lisa Winter
Tel: 708-225-2453
Email: LWinter@atkore.com
John Deitzer
Tel: 708-225-2124
Email: JMDeitzer@atkore.com
ATKORE INC. 
